Advance Tax is pre paid tax by the assessee on the income earned during the year. In simple words, you can say that assessee have to paid taxes in advance on the estimate income during the year in installment for individual assessee, companies and corporate assessees.
For example, for financial year 2019-20 (relevant to assessment year 2020-21) advance tax is payable in installments during 2019-20.
Who is Liable to Pay Advance Tax?
The following persons are required to pay advance tax before the last date.
- Salaried Persons whose tax calculated more than Rs.10,000 are liable to pay advance tax.
- Businessman whose tax calculated more than Rs.10,000 are liable to pay advance tax.
- Freelancers whose tax calculated more than Rs.10,000 are liable to pay advance tax.
Who is not Liable to Pay Advance Tax?
- Senior Citizens whose age is 60 years or older not running any business exempt to pay advance tax.
Advance Tax Due Dates for (A.Y.2020-21 F.Y. 2019-20)
Advance tax has to paid by the assessee on the following dates specified by the Income Tax act. The delay in the payment of advance tax attracts penalty. The following dates are applicable to all assessees. Check Interest on Short or Non Payment of Advance Tax
|Advance Tax||Installment||Due Dates|
|15% of Advance Tax||1st Installment||15th June|
|30% of Advance Tax||2nd Installment||15th September|
|30% of Advance Tax||3rd Installment||15th December|
|25% of Advance Tax||4th Installment||15th March|
|Tax on capital gains or casual incomes arising after 15th March, if any|
Advance Tax Payment Due Dates Important Points
- Business/Professional assessees declaring income under the estimated income scheme u/s44AD or 44ADA shall be required to deposit the whole of advance tax by 15th March of the financial year.
- Any amount deposited by 31st March, is treated as advance tax for that financial year.
- In the case of salary Income the tax is deducted by the employer. So TDS is also treated as prepaid taxes. So salaried person pay advance tax but in the shape of TDS. So the Salaried person need to pay tax, if the tax is less than TDS. But if the TDS is less than actual Tax then they are also liable to pay advance tax.
But TDS should be deposited latest by 31st March of the financial year.
If on the due dates is Sunday or any holiday then the assesee can deposit the advance tax on next working day. It will treated as advance tax and no penal interest will be charged.
Check our article: Who is required to pay advance tax?
The payment of advance tax dates are very important. The penal interest at the end of the financial year will be calculated by the delay from the due date of particular installment. So don’t miss the advance tax payment date. To do this bookmark this page and visit regularly or subscribe your email to get monthly reminder of all the due dates/closing dates of Income Tax and other taxes in India.
How to Calculate Advance Tax?
- Advance tax is payable in installment as above on total income estimated for the financial year including capital gains and casual incomes such as winning from lotteries, races etc.
- The income for the current year should be estimated as precisely and correctly as possible. The mistake attracts penal interest.
- If any capital gains or casual income arises subsequent to payment of an installment, the remaining installment of advance tax should be revised. If any income arises after 15th March then advance tax can be deposited on such income up to 31st March.
Advance Tax Payment – Latest Amendments
Senior citizens (Over 60 Years) need not to pay advance tax if not having any business income. (w.e.f.1-4-2012).
Hope you will like our article on advance tax payment/instalment due dates. If you have any queries related to the last dates of advance tax payment then comment, we will try to answer in next 24 hours.